La Jolla Pharmaceutical Company (NASDAQ: LJPC) reported net 2018 sales of $10.1 million for the septic shock treatment Giapreza this week and announced 2019 sales guidance of $24 million to $28 million for the drug.

The guidance represents continued linear growth, despite the company’s plans efforts to reach an inflection point in Giapreza’s sales by moving to centralized contracting and offering volume discounts, according to H.C. Wainwright.

The Analyst

Analyst Edward White maintained a Buy rating on La Jolla and reduced the price target from $48 to $25.

The Thesis

La Jolla expects a decision in June on its Marketing Authorization Application to the European Medicines Agency for Giapreza, White said in a Wednesday note.

If Giapreza receives EMA approval, it could be launched in Europe in the back half of 2019, according to La Jolla.

The impact of the below-expectation Giapreza sales guidance for 2019 is offset partially by cost-cutting expectations in R&D and SG&A, the analyst said.

H.C. Wainwright reduced its revenue estimates for the company from $17.5 million to $10 million in 2018 and from $89.7 million to $24.8 million in 2019. EPS estimates for 2018 were lowered from a $7.96 loss to an $8.16 loss and from a $6.03 loss to a $7.31 loss in 2019.

Price Action

La Jolla Pharmaceutical shares were rallying nearly 16 percent to $6.32 at the time of publication Wednesday.